A sign for a "payday advance"
A sign for a "payday advance" - 
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Steve Chiotakis: There are a lot of people -- many of them poor -- who don't even deal with a financial institution. At a conference today in Washington, consumer advocates and lawmakers will turn a spotlight on the so-called "underbanked." Marketplace's Mitchell Hartman reports.

Mitchell Hartman: Imagine for a second that you're one of the 50 million or so Americans without a checking account or a credit card. You live paycheck to paycheck. Then, the car breaks down. And the rent's due.

MELISSA KOIDE: Consumers will turn to these higher-cost products, including payday loans, which unfortunately can really escalate in terms of the cost.

Melissa Koide of the New America Foundation says the solution is to bring people living "off the credit grid" in, so they can borrow on reasonable terms in an emergency, and start saving to build financial security.

Arjan Schutte of the Center for Financial Services Innovation says, with access to credit down in the recession, new models are needed.

ARJAN SCHUTTE: At once to provide powerful new capabilities and protections to consumers, but on the other hand, not to stifle innovation.

Innovation can be as simple as letting low-income consumers build a credit score by showing they pay their utilities and rent on time. And advocates say, while new laws are needed to protect consumers, banks need to be encouraged to reach out to people just starting down the credit road.

I'm Mitchell Hartman for Marketplace.

Follow Mitchell Hartman at @entrepreneurguy